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Copper theft epidemic has lawmakers looking for answers

SEATTLE -- There's a short answer to why copper metal thefts are so high.

Ten years ago, copper futures were trading at $.80 cents per pound on the Chicago Mercantile Exchange. Today's, it's trading around $3.40 per pound, down from a 52 week high of $3.81 per pound.

Because it can be found anywhere and is hard to trace, copper theft can be very lucrative.

While Washington state lawmakers revamped the state's metal theft law in 2007, unintended consequences have developed. The law set higher standards for recyclers to follow when recording the seller's identity. But thieves are taking advantage of the law's attempt to protect the average person who isn't a thief or just wants to makes a living peddling small amounts a copper for cash.

"It's created this kind of little loophole the thieves are all using," said Chris Kettman, Director of Operations for Simon Metals in Tacoma.

Kettman's firm is one of the larger recyclers in the Puget Sound that invests heavily in security and tracking the dozens of people who come to the their loading dock daily to sell metal.

"Because of the way the law is written, (the thieves) go from one small location to the next small location to the next location getting $30 each step of the way," Kettman said.

For anything more than $30, the recycler must mail a check to the seller instead of paying in cash. A check would require a legitimate mailing address which thieves are reluctant to give because checks are easily traceable.

The $30 limit applies only to non-ferrous metals like copper, it but excludes iron and aluminum. It's also a daily limit, and a seller without a contractor's license can only get $30 per day, per recycler. Anything more than that, a recycler could be fined $1,000 and face jail time.

There are several dozen recyclers in the Puget Sound area and more being added monthly because of the high price of copper. Thieves are the culprits, but recyclers who are not following the law are making it easy for thieves to profit.

The Problem Solvers wanted to see if a random group of recyclers are following all the rules set by the 2007 law.

Those rules require the recycler to record the seller's "government issued ID," name and address, the seller's vehicle information -- including license plate number -- and to sign a declaration stating the seller owns the scrap metal and none of it is stolen.

The Problem Solvers picked five recyclers at random in South King County and Pierce County. We brought in commercial grade, industrial wire from a local utility that an average person would not have access to or even find in their own garage. We wanted to see if anyone would simply question us on how and where we got the commercial grade wire.

We used a fake out-of-state driver's license from a Chinese company well known for producing authentic-looking driver's licenses to see if anybody had equipment that could verify a legitimate driver's license.

Only two of the five recyclers, Valley Recycling in Pacific and Hammer Hog Metals in Kent, did everything they were legally supposed to do. Commercial Metals in Pacific did all the legal requirements except record my vehicle information.

Northwest Steel and Recycling in Renton only recorded my driver's license info but did not record my vehicle description or license plate number and did not require me to sign a declaration saying my metals were not stolen, all which are required by state law. We also received $30 in cash, more than the daily legal cash amount. They should have offered us a check.

S-K Metals in Bonney Lake was the worst offender we encountered. The operators recorded just my name on a simple receipt with no address, no vehicle information, incorrectly wrote down our bogus driver's license number and never had me sign a declaration that the metals we sold to them were not stolen.

Surprisingly, nobody questioned us on where we got our high-grade copper wire. Nobody rejected my fake ID. Three of the five had me sign the declaration that my copper wasn't stolen.

After our visits, we contacted every recycler to let them know of our experiences. Ryan Cox, the owner of Northwest Steel and Recycling blamed the employee we dealt with having a "mix-up". He said laziness on the part of the employee was the reason why we received $34 in cash rather a check. Cox also said he’s working on a form for buyers to sign that includes the declaration of ownership all sellers must sign.

The owner of S- K Metals said he was unaware of all the legal requirements and plan to "do better" in the future. The owner, who said he is Korean blamed in lack of understanding the law on his English skills.

Every recycler where we brought in more than daily cash limit of $30 of non-ferrous metal, workers coached us on how to get cash instead of a check. They told us not to sell our stash of metal all at once but to come back with smaller batches over several days in order to receive the daily limit of cash instead of a check.

Recyclers say that's the thieves routine.

There is now a bill on Gov. Jay Inslee's desk that could tighten the noose around copper thieves.

"We want to send a message that you aren't going to get away with it anymore," said Rep. Roger Goodman, the Democratic sponsor of House Bill 1552.

For the last year, Goodman has been working with recyclers and law enforcement to tighten the $30 loophole. The bill also calls for setting up a licensing strategy for both recyclers and small time peddlers of scrap metal and create a statewide "no-buy" database.

"There's different municipalities that have no buy lists and that just chases the thieves between jurisdiction to jurisdiction," said Jerry Eck, Owner of Valley Recycling. "A statewide list I think will solve a lot of problems."

The bill would allow recyclers who go digital and install cameras to record all sales and photocopy all IDs the ability to continue with the $30 daily cash payouts to sellers who don't have a contractor's license. Recyclers who don't have the equipment must issue checks to non-contractors no matter of the amount of that's being sold. It's an attempt to strengthen the paper trail for law enforcement.

But the bill has a funding component of $1.5 million to support the "no-buy" database and grants for law enforcement education. If the minimum funding for the bill is not part of the state budget that is currently being debated, then the bill is dead.

Inslee has the option of striking the funding requirement but a lobbyist for many recyclers says the bill may lose support. Jay Sternoff of the Institute of Scrap Recycling Industries says the bill "would most likely lose law enforcement support if the bill stands and no grant authority funding is provided."